UPDATE 3: PM: No discussion of Russian progressive income tax

(Rewrites throughout)

MOSCOW, Jan 12 (PRIME) – The Russian government does not discuss introduction of a progressive income tax scale, Prime Minister Dmitry Medvedev said at the Gaidar economic forum on Thursday.

“We were and will make all the decisions connected with structural transformation in a very thoroughly considered and cautious way… And in general, we need to act, and even say some things, extremely cautiously,” he said.

“We’ve agreed long ago not to touch the taxation system. The president said and I said at the end of last year that the issue of a progressive scale for the personal income tax is not on the agenda now. Anyway, some of my colleagues would say that the issue is being discussed. It is not being discussed.”

His comments came after Deputy Prime Minister Olga Golodets said that the government is discussing ways to raise household incomes proactively, and changes in the income tax system, such as introduction of a progressive scale and exemptions for the poorest, are seen as effective measures.

The government is discussing introduction of a progressive income tax scale while relieving the lowest income households from the tax, she said. “And since I said that overcoming the decline in real wages of households and overcoming poverty for part of the population which found itself in this situation are the key problems now, a release of the bottom decile from the income tax would be a real step towards higher personal incomes and we would like to support that. We are calculating this system,” she said.

Golodets said that 4.9 million people receive salaries below the minimum wage, and in general, household incomes plummeted over the last few years resulting in the lack of consumption and a downturn in retail. “Our general policy is indeed to overñome this issue connected with low-paid jobs in our economy,” she said. “Recovery of household incomes is a priority goal for us.”

Labor Minister Maxim Topilin said that the minimum wage must grow to reach the living wage in all regions by September 2017.

Topilin also said his ministry is discussing an increase of the retirement age with Alexei Kudrin, a key country’s economic strategist. He added that a higher retirement age, which is now 55 for women and 60 for men, has been constantly discussed lately, but did not elaborate.

Still, the government will not decide on a higher retirement age in 2017, Topilin said.

End